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From 1990 through 2001, the Department of Defense delivered over $138 billion in defense articles and services to foreign countries through its foreign military sales programs that included spare parts. Some sales occur under blanket order cases, which are requisitions for a specific dollar value and generally cover classes of parts that a country may need rather than a specific item within a class. The management of foreign military sales is especially critical given the need to prevent certain foreign countries from receiving parts that, if released, could be used against U.S. interests. This report stems from audit work performed in connection with our report, Foreign Military Sales: Improved Air Force Controls Could Prevent Unauthorized Shipments of Classified and Controlled Spare Parts to Foreign Countries. In that report, we address issues relating to classified spare parts that are restricted for national security reasons and controlled spare parts that are not classified but contain military technology or applications or are controlled cryptographic parts. During our work for that report, we observed a situation that brought into question Air Force internal controls to prevent unclassified or uncontrolled spare parts that contain sensitive military technology from being released to foreign countries ineligible to receive them. This report focuses on whether the Air Force has internal controls in place to prevent spare parts that contain sensitive military technology from being released to foreign countries ineligible to receive the parts.

The Air Force does not currently have any internal controls in place to prevent the release of spare parts containing sensitive military technology that are ordered under blanket orders and that the Air Force does not want to release to foreign countries ineligible to receive the parts. This has resulted in the inappropriate release of such parts. During our work, we identified an instance that occurred in 1997 in which a requisition for a C-130 refueling kit, which was to be used on U.S. aircraft only, was not reviewed by anyone because there were no controls in place to require that it be reviewed before it was shipped to a foreign country. When we brought this situation to the attention of Air Force Security Assistance Center officials, they said that the Air Force does not have clear guidance for identifying parts containing sensitive military technology that the Air Force does not want shipped to some foreign countries. They acknowledged that releases of similar spare parts to foreign countries ineligible to receive them had occurred and that such releases were a problem. They also acknowledged that as a result of our work the Air Force Audit Agency will review its controls for selling military technology to foreign countries. The Air Force uses its Security Assistance Management Information System to verify in part that countries are eligible to receive classified or controlled parts. However, this control could also be used to identify for foreign military sales case managers review spare parts that contain sensitive military technology and that the Air Force does not want to release to foreign countries ineligible to receive them.

Recommendations for Executive Action

Status: Closed - Implemented

Comments: The Air Force indicated that it will be using a controlled item inventory code that will identify parts that contain sensitive military technology. This code should allow the Air Force to be able to identify those defense parts that contain sensitive technology that is not to be released to foreign countries.

Recommendation: The Secretary of the Air Force should direct the Deputy Under Secretary of the Air Force, International Affairs, to develop, or direct an appropriate source within the Air Force to develop, criteria for identifying spare parts containing sensitive military technology that should not be released to foreign countries.

Agency Affected: Department of Defense: Department of the Air Force

Status: Closed - Implemented

Comments: The Air Force has indicated that appropriate edits have been established in its Security Assistance Management Information System so that requisitions for spare parts containing sensitive military technology would be referred to foreign military sales case mangers for review prior to being released to foreign customers.

Recommendation: The Secretary of the Air Force should direct the Deputy Under Secretary of the Air Force, International Affairs, to establish appropriate edits in the Security Assistance Management Information System so that requisitions for spare parts containing sensitive military technology that are identified above are referred to foreign military sales case managers for review.